The stock market has been volatile for almost 5 years now with no signs of recovery. But in all this volatility there are certain stocks which are considered relatively safer bet. These are High Dividend Yield Stocks. Before we name these stocks, let’s look at some basics.
What is Dividend?
Dividend is money paid regularly by a company to its shareholders out of its profits (or reserves). Dividends are mostly paid quarterly or annually.
How dividends help investors?
If you have been able to identify the right stocks, dividend can be source of regular income and that too without selling any of your shares. Also with rising market you also gain in terms of price appreciation of the holding share while in the falling market the loss is offset to an extent by the regular dividends paid by the company. Thus High Dividend Yield Stocks are consider safer bet.
Dividend yield gives the income earned from stock holding from dividends alone. It is ratio of the annual dividend paid per share to the current market price per share.
Dividend Yield = (Dividend per share/CMP) X 100
For example, HCL Info’s dividend yield is given by:
Dividend Yield = (8/39) x 100 = 20%
This means that if you buy HCL Infosystem today and holds it for one year, you can expect to get 20% returns (looking historically) in terms of dividend paid by the company. Additionally you might gain or lose due to price change of the share itself.
High Dividend Yield Stocks: Criteria
Following is the criteria for high dividend yield stocks:
- All stocks in S&P CNX 500 has been considered
- Companies which have been regularly paying dividend for last 5 years with dividend yield > 3% every year
- P/E Ratio is lower than the industry average
- Price to Book Value less than 2
Following are the stocks which qualify after the above criteria:
|Stocks||Latest Price (Rs.) *||Face Value||Dividend per Share||Dividend (%)||Dividend Yield|
|HCL Infosystems Ltd.||39.20||2||8||400%||20.4%|
|Aarti Industries Ltd.||72.70||5||3.5||70%||4.8%|
|Balmer Lawrie & Company Ltd.||588.25||10||26||260%||4.4%|
|Graphite India Ltd.||82.05||2||3.5||175%||4.3%|
|Deepak Fertilizers & Petrochemicals Corporation Ltd.||131.45||10||5.5||55%||4.2%|
|Jammu & Kashmir Bank Ltd.||935.70||10||33.5||335%||3.6%|
|Bajaj Holdings & Investment Ltd.||751.40||10||25||250%||3.3%|
* The above stock price is as of August 7, 2012
The above research has been done by Jainam
The above list is just a guideline and you might like to do further research before investing in any of the stocks.
4 thoughts on “High Dividend Yield Stocks”
Can you put an updated list of high dividend list of stocks?
The list of stocks don’t change so frequently especially if you want to invest long term. The criteria of stock selection might throw up a different list. I would surely publish some more High Dividend yielding stocks in near future based on different criteria. Keep visiting us for more.
I was looking for good stocks with high dividend yield. Should I invest in HCL Infosystems Ltd.?
I am not an expert on Stock Market and would not give recommendations on individual stocks. But based on above research, HCL Infosystems Ltd. is a good stock based on dividend yield. I would request you to do some more research on its business model, read some research reports, etc before investing.